NatWest Markets, a division of Royal Bank of Scotland Group Plc, expects the Bank of England (BOE) to cut interest rates to 0.5% from 0.75% later this month, having previously forecasted no move until May, according to Bloomberg.
Ross Walker, economist at NatWest, expects the central bank to deliver another cut later in the year.
As of Tuesday, Money markets were pricing about 50% chance of a rate cut on Jan. 30.
The rate reduction odds have increased due to BOE’s recent dovish shift. In his first major speech of 2020, Carney said the Monetary Policy Committee has plenty of firepowers to aid the economy if necessary. Policymaker Silvana Tenreyro said that she may support a rate cut in the next few months if and Gertjan Vlieghe said there is no justification to not cut rates.